10-Q 1 vishayintertech_10q.htm QUARTERLY REPORT
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended           July 2, 2022

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number 011-07416

Vishay Intertechnology, Inc.
(Exact name of registrant as specified in its charter)

Delaware  
38-1686453
(State or Other Jurisdiction of Incorporation)
 
(I.R.S. Employer Identification Number)
     
63 Lancaster Avenue
Malvern, Pennsylvania 19355-2143
 
610-644-1300
(Address of Principal Executive Offices)
 
(Registrant’s Area Code and Telephone Number)

Securities registered pursuant to Section 12(b) of the Act:
       
 
Title of each class
Trading symbol
Name of exchange on which registered
 
  Common stock, par value $0.10 per share VSH New York Stock Exchange LLC  

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes  ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.)
Yes  ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 
Large Accelerated Filer 
Accelerated filer ☐
 
Non-accelerated filer ☐
Smaller reporting company
 
Emerging growth company
 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes  No

As of July 29, 2022 the registrant had 130,680,319 shares of its common stock (excluding treasury shares) and 12,097,148 shares of its Class B common stock outstanding.






















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2

VISHAY INTERTECHNOLOGY, INC.
FORM 10-Q
July 2, 2022
CONTENTS

     
Page Number
   
         
     
         
     
         
     
         
     
         
     
         
     
         
     
         
     
         
     
         
   
         
   
         
   
         
   
         
   
         
   
         
   
         
   
         
   
         
   
         
   
         
     
3


PART I  - FINANCIAL INFORMATION

Item 1. Financial Statements

VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets
(In thousands)

   
July 2, 2022
   
December 31, 2021
 
   
(Unaudited)
       
Assets
           
Current assets:
           
Cash and cash equivalents
 
$
765,593
   
$
774,108
 
Short-term investments
   
81,112
     
146,743
 
Accounts receivable, net
   
429,778
     
396,458
 
Inventories:
               
Finished goods
   
172,796
     
147,293
 
Work in process
   
264,123
     
226,496
 
Raw materials
   
196,929
     
162,711
 
Total inventories
   
633,848
     
536,500
 
                 
Prepaid expenses and other current assets
   
160,089
     
156,689
 
Total current assets
   
2,070,420
     
2,010,498
 
                 
Property and equipment, at cost:
               
Land
   
73,047
     
74,646
 
Buildings and improvements
   
629,015
     
639,879
 
Machinery and equipment
   
2,750,175
     
2,758,262
 
Construction in progress
   
147,345
     
145,828
 
Allowance for depreciation
   
(2,629,014
)
   
(2,639,136
)
Property and equipment, net
   
970,568
     
979,479
 
                 
Right of use assets
   
111,881
     
117,635
 
                 
Deferred income taxes
    89,181       95,037  
                 
Goodwill
   
164,295
     
165,269
 
                 
Other intangible assets, net
   
62,698
     
67,714
 
                 
Other assets
   
94,550
     
107,625
 
Total assets
 
$
3,563,593
   
$
3,543,257
 

Continues on following page.
4


VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Balance Sheets (continued)
(In thousands)

   
July 2, 2022
   
December 31, 2021
 
   
(Unaudited)
       
Liabilities and equity
           
Current liabilities:
           
Trade accounts payable
 
$
243,496
   
$
254,049
 
Payroll and related expenses
   
160,415
     
162,694
 
Lease liabilities
   
22,734
     
23,392
 
Other accrued expenses
   
214,865
     
218,089
 
Income taxes
   
62,592
     
35,443
 
Total current liabilities
   
704,102
     
693,667
 
                 
Long-term debt less current portion
   
463,302
     
455,666
 
U.S. transition tax payable
   
83,010
     
110,681
 
Deferred income taxes
   
49,542
     
69,003
 
Long-term lease liabilities
   
92,208
     
99,987
 
Other liabilities
   
88,554
     
95,861
 
Accrued pension and other postretirement costs
   
242,464
     
271,672
 
Total liabilities
   
1,723,182
     
1,796,537
 
                 
Equity:
               
Vishay stockholders' equity
               
Common stock
   
13,291
     
13,271
 
Class B convertible common stock
   
1,210
     
1,210
 
Capital in excess of par value
   
1,350,620
     
1,347,830
 
Retained earnings
   
588,803
     
401,694
 
   Treasury stock (at cost)
    (36,161 )     -  
Accumulated other comprehensive income (loss)
   
(80,344
)
   
(20,252
)
Total Vishay stockholders' equity
   
1,837,419
     
1,743,753
 
Noncontrolling interests
   
2,992
     
2,967
 
Total equity
   
1,840,411
     
1,746,720
 
Total liabilities and equity
 
$
3,563,593
   
$
3,543,257
 

See accompanying notes.
5


VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Operations
(Unaudited - In thousands, except per share amounts)

   
Fiscal quarters ended
 
   
July 2, 2022
   
July 3, 2021
 
             
Net revenues
 
$
863,512
   
$
819,120
 
Costs of products sold
   
602,289
     
589,848
 
Gross profit
   
261,223
     
229,272
 
                 
Selling, general, and administrative expenses
   
110,400
     
103,900
 
Operating income
   
150,823
     
125,372
 
                 
Other income (expense):
               
Interest expense
   
(4,307
)
   
(4,443
)
Other
   
1,380
   
(3,749
)
Total other income (expense)
   
(2,927
)
   
(8,192
)
                 
Income before taxes
   
147,896
     
117,180
 
                 
Income tax expense
   
35,127
     
23,799
 
                 
Net earnings
   
112,769
     
93,381
 
                 
Less: net earnings attributable to noncontrolling interests
   
381
     
189
 
                 
Net earnings attributable to Vishay stockholders
 
$
112,388
   
$
93,192
 
                 
Basic earnings per share attributable to Vishay stockholders
 
$
0.78
   
$
0.64
 
                 
Diluted earnings per share attributable to Vishay stockholders
 
$
0.78
   
$
0.64
 
                 
Weighted average shares outstanding - basic
   
143,996
     
145,017
 
                 
Weighted average shares outstanding - diluted
   
144,397
     
145,445
 
                 
Cash dividends per share
 
$
0.100
   
$
0.095
 

See accompanying notes.
6


VISHAY INTERTECHNOLOGY, INC.
Consolidated Statements of Comprehensive Income
(Unaudited - In thousands)

   
Fiscal quarters ended
 
   
July 2, 2022
   
July 3, 2021
 
             
Net earnings
 
$
112,769
   
$
93,381
 
                 
Other comprehensive income (loss), net of tax
               
                 
Pension and other  post-retirement actuarial items
   
1,365
     
2,020
 
                 
Foreign currency translation adjustment
   
(49,532
)
   
9,285
 
                 
Other comprehensive income (loss)
   
(48,167
)
   
11,305
 
                 
Comprehensive income
   
64,602
     
104,686
 
                 
Less: comprehensive income attributable to noncontrolling interests
   
381
     
189
 
                 
Comprehensive income attributable to Vishay stockholders
 
$
64,221
   
$
104,497
 

See accompanying notes.
7


VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Operations
(Unaudited - In thousands, except per share amounts)

   
Six fiscal months ended
 
   
July 2, 2022
   
July 3, 2021
 
             
Net revenues
 
$
1,717,305
   
$
1,583,752
 
Costs of products sold
   
1,196,974
     
1,151,531
 
Gross profit
   
520,331
     
432,221
 
                 
Selling, general, and administrative expenses
   
223,255
     
209,585
 
Operating income
   
297,076
     
222,636
 
                 
Other income (expense):
               
Interest expense
   
(8,529
)
   
(8,819
)
Other
   
(4,371
)
   
(9,480
)
Total other income (expense)
   
(12,900
)
   
(18,299
)
                 
Income before taxes
   
284,176
     
204,337
 
                 
Income tax expense
   
67,457
     
39,313
 
                 
Net earnings
   
216,719
     
165,024
 
                 
Less: net earnings attributable to noncontrolling interests
   
758
     
397
 
                 
Net earnings attributable to Vishay stockholders
 
$
215,961
   
$
164,627
 
                 
Basic earnings per share attributable to Vishay stockholders
 
$
1.49
   
$
1.14
 
                 
Diluted earnings per share attributable to Vishay stockholders
 
$
1.49
   
$
1.13
 
                 
Weighted average shares outstanding - basic
   
144,527
     
144,992
 
                 
Weighted average shares outstanding - diluted
   
144,978
     
145,453
 
                 
Cash dividends per share
 
$
0.20
   
$
0.19
 

See accompanying notes.

8


VISHAY INTERTECHNOLOGY, INC.
Consolidated Statements of Comprehensive Income
(Unaudited - In thousands)

   
Six fiscal months ended
 
   
July 2, 2022
   
July 3, 2021
 
             
Net earnings
 
$
216,719
   
$
165,024
 
                 
Other comprehensive income (loss), net of tax
               
                 
Pension and other post-retirement actuarial items
   
2,924
     
3,884
 
                 
Foreign currency translation adjustment
   
(63,016
)
   
(17,664
)
                 
Other comprehensive income (loss)
   
(60,092
)
   
(13,780
)
                 
Comprehensive income
   
156,627
     
151,244
 
                 
Less: comprehensive income attributable to noncontrolling interests
   
758
     
397
 
                 
Comprehensive income attributable to Vishay stockholders
 
$
155,869
   
$
150,847
 

See accompanying notes.
9


VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Cash Flows
(Unaudited - In thousands)

   
Six fiscal months ended
 
   
July 2, 2022
   
July 3, 2021
 
             
Operating activities
           
Net earnings
 
$
216,719
   
$
165,024
 
Adjustments to reconcile net earnings to net cash provided by operating activities:
               
Depreciation and amortization
   
80,967
     
83,879
 
(Gain) loss on disposal of property and equipment
   
(293
)
   
(207
)
Inventory write-offs for obsolescence
   
10,777
     
9,550
 
Deferred income taxes
   
5,922
     
519
 
Other
   
6,733
     
5,758
 
  Change in U.S. transition tax liability
    (14,757 )     (14,757 )
  Change in repatriation tax liability
    (25,201 )     -  
Net change in operating assets and liabilities
   
(172,555
)
   
(74,983
)
Net cash provided by operating activities
   
108,312
     
174,783
 
                 
Investing activities
               
Capital expenditures
   
(95,700
)
   
(60,710
)
Proceeds from sale of property and equipment
   
377
     
234
 
Purchase of short-term investments
   
(7,769
)
   
(27,488
)
Maturity of short-term investments
   
66,763
     
53,679
 
Other investing activities
   
(199
)
   
347
 
Net cash used in investing activities
   
(36,528
)
   
(33,938
)
                 
Financing activities
               
Repurchase of convertible debt instruments
   
-
     
(300
)
Net proceeds on revolving credit lines
    6,000       -  
Dividends paid to common stockholders
   
(26,389
)
   
(25,216
)
Dividends paid to Class B common stockholders
   
(2,419
)
   
(2,298
)
Repurchase of common stock held in treasury
    (36,161 )     -
 
Distributions to noncontrolling interests
    (733 )     (800 )
Cash withholding taxes paid when shares withheld for vested equity awards
   
(2,123
)
   
(1,963
)
Net cash used in financing activities
   
(61,825
)
   
(30,577
)
Effect of exchange rate changes on cash and cash equivalents
   
(18,474
)
   
(3,383
)
                 
Net increase (decrease) in cash and cash equivalents
   
(8,515
)
   
106,885
 
                 
Cash and cash equivalents at beginning of period
   
774,108
     
619,874
 
Cash and cash equivalents at end of period
 
$
765,593
   
$
726,759
 

See accompanying notes.
10


VISHAY INTERTECHNOLOGY, INC.
Consolidated Condensed Statements of Equity
(Unaudited - In thousands, except share and per share amounts)

   
Common
Stock
   
Class B
Convertible
Common
Stock
   
Capital in
Excess of Par
Value
   
Retained
Earnings
(Accumulated
Deficit)
    Treasury Stock    
Accumulated
Other
Comprehensive
Income (Loss)
   
Total Vishay
Stockholders'
Equity
   
Noncontrolling
Interests
   
Total
Equity
 
Balance at December 31, 2020
 
$
13,256
   
$
1,210
   
$
1,409,200
   
$
138,990
    $ -    
$
13,559
   
$
1,576,215
   
$
2,800
   
$
1,579,015
 
Cumulative effect of accounting change for adoption of ASU 2020-06
   
-
     
-
     
(66,078
)
   
20,566
      -      
-
     
(45,512
)
   
-
     
(45,512
)
Net earnings
   
-
     
-
     
-
     
71,435
      -      
-
     
71,435
     
208
     
71,643
 
Other comprehensive income (loss)
   
-
     
-
     
-
     
-
      -      
(25,085
)
   
(25,085
)
   
-
     
(25,085
)
Issuance of stock and related tax withholdings for vested restricted stock units (149,722 shares)
   
15
     
-
     
(1,978
)
   
-
      -      
-
     
(1,963
)
   
-
     
(1,963
)
Dividends declared ($0.095 per share)
   
-
     
-
     
20
     
(13,777
)
    -      
-
     
(13,757
)
   
-
     
(13,757
)
Stock compensation expense
   
-
     
-
     
4,120
     
-
      -      
-
     
4,120
     
-
     
4,120
 
Balance at April 3, 2021
 
$
13,271
   
$
1,210
   
$
1,345,284
   
$
217,214
    $ -    
$
(11,526
)
 
$
1,565,453
   
$
3,008
   
$
1,568,461
 
Net earnings
   
-
     
-
     
-
     
93,192
      -      
-
     
93,192
     
189
     
93,381
 
Other comprehensive income
   
-
     
-
     
-
     
-
      -      
11,305
     
11,305
     
-
     
11,305
 
Distributions to noncontrolling interests
   
-
     
-
     
-
     
-
      -      
-
     
-
     
(800
)
   
(800
)
Dividends declared ($0.095 per share)
   
-
     
-
     
20
     
(13,777
)
    -      
-
     
(13,757
)
   
-
     
(13,757
)
Stock compensation expense
   
-
     
-
     
828
     
-
      -      
-
     
828
     
-
     
828
 
Balance at July 3, 2021
 
$
13,271
   
$
1,210
   
$
1,346,132
   
$
296,629
    $ -    
$
(221
)
 
$
1,657,021
   
$
2,397
   
$
1,659,418
 
                                                                         
Balance at December 31, 2021   $ 13,271     $ 1,210     $ 1,347,830     $ 401,694     $ -     $ (20,252 )   $ 1,743,753     $ 2,967     $ 1,746,720  
Net earnings     -       -       -       103,573       -       -       103,573       377       103,950  
Other comprehensive income (loss)
    -       -       -       -       -       (11,925 )     (11,925 )     -       (11,925 )
Issuance of stock and related tax withholdings for vested restricted stock units (189,731 shares)     19       -       (2,142 )     -       -       -       (2,123 )     -       (2,123 )
Dividends declared ($0.10 per share)
    -       -       22       (14,491 )     -       -       (14,469 )     -       (14,469 )
Stock compensation expense     -       -       3,842       -       -       -       3,842       -       3,842  
Repurchase of common stock held in treasury (513,227 shares)
    -       -       -       -       (9,873 )     -       (9,873 )     -       (9,873 )
Balance at April 2, 2022   $ 13,290     $ 1,210     $ 1,349,552     $ 490,776     $ (9,873 )   $ (32,177 )   $ 1,812,778     $ 3,344     $ 1,816,122  
Net earnings     -       -       -       112,388       -       -       112,388       381       112,769  
Other comprehensive income     -       -       -       -       -       (48,167 )     (48,167 )     -       (48,167 )
Distributions to noncontrolling interests     -       -       -       -       -       -       -       (733 )     (733 )
Issuance of stock and related tax withholdings for vested restricted stock units (11,308 shares)     1       -       (1 )     -       -       -       -       -       -  
Dividends declared ($0.10 per share)
    -       -       22       (14,361 )     -       -       (14,339 )     -       (14,339 )
Stock compensation expense     -       -       1,047       -       -       -       1,047       -       1,047  
Repurchase of common stock held in treasury (1,400,039 shares)
    -       -       -       -       (26,288 )     -       (26,288 )     -       (26,288 )
Balance at July 2, 2022   $ 13,291     $ 1,210     $ 1,350,620     $ 588,803     $ (36,161 )   $ (80,344 )   $ 1,837,419     $ 2,992     $ 1,840,411  

See accompanying notes.
11

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

Note 1 – Basis of Presentation

The accompanying unaudited consolidated condensed financial statements of Vishay Intertechnology, Inc. (“Vishay” or the “Company”) have been prepared in accordance with the instructions to Form 10-Q and therefore do not include all information and footnotes necessary for presentation of financial position, results of operations, and cash flows required by accounting principles generally accepted in the United States (“GAAP”) for complete financial statements. The information furnished reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair summary of the financial position, results of operations, and cash flows for the interim periods presented.  The financial statements should be read in conjunction with the consolidated financial statements filed with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.  The results of operations for the fiscal quarter and six fiscal months ended July 2, 2022 are not necessarily indicative of the results to be expected for the full year.

The Company reports interim financial information for 13-week periods beginning on a Sunday and ending on a Saturday, except for the first fiscal quarter, which always begins on January 1, and the fourth fiscal quarter, which always ends on December 31.  The four fiscal quarters in 2022 end on April 2, 2022, July 2, 2022, October 1, 2022, and December 31, 2022, respectively.  The four fiscal quarters in 2021 ended on April 3, 2021, July 3, 2021, October 2, 2021, and December 31, 2021, respectively. 

Reclassifications

Certain prior period amounts have been reclassified to conform to the current financial statement presentation.

Note 2 – Impact of COVID-19 Pandemic

The Company's operations in the People's Republic of China, particularly in Shanghai, were impacted by COVID-19 government mandated shut-downs of our facilities in the second fiscal quarter of 2022.  The Company incurred incremental costs separable from normal operations that are directly related to the shut-downs, primarily wages paid to manufacturing employees during the shut-downs, additional wages and hardship allowances for working during lockdown periods, and temporary housing for employees due to travel restrictions, which were partially offset by government subsidies.  The net impact of the costs and subsidies are reported as cost of products sold ($6,661) and selling, general, and administrative expenses of ($546) based on employee function on the consolidated condensed statements of operations for the fiscal quarter and six fiscal months ended July 2, 2022.

12

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

Note 3 – Leases

The net right of use assets and lease liabilities recognized on the consolidated condensed balance sheets for the Company's operating leases were as follows:

 
July 2, 2022
   
December 31, 2021
 
Right of use assets
           
Operating Leases
           
Buildings and improvements
 
$
107,605
   
$
112,951
 
Machinery and equipment
   
4,276
     
4,684
 
Total
 
$
111,881
   
$
117,635
 
Current lease liabilities
               
Operating Leases
               
Buildings and improvements
 
$
20,344
   
$
20,851
 
Machinery and equipment
   
2,390
     
2,541
 
Total
 
$
22,734
   
$
23,392
 
Long-term lease liabilities
               
Operating Leases
               
Buildings and improvements
 
$
90,379
   
$
97,890
 
Machinery and equipment
   
1,829
     
2,097
 
Total
 
$
92,208
   
$
99,987
 
Total lease liabilities
 
$
114,942
   
$
123,379
 

Lease expense is classified in the statements of operations based on asset use.  Total lease cost recognized on the consolidated condensed statements of operations is as follows:

 
Fiscal quarters ended
   
Six fiscal months ended
 
   
July 2, 2022
   
July 3, 2021
   
July 2, 2022
   
July 3, 2021
 
Lease expense
                       
Operating lease expense
 
$
6,304
   
$
6,248
   
$
12,756
   
$
12,400
 
Short-term lease expense
   
236
     
428
     
540
     
753
 
Variable lease expense
   
-
     
66
     
100
     
193
 
Total lease expense
 
$
6,540
   
$
6,742
   
$
13,396
   
$
13,346
 

The Company paid $12,241 and $12,176 for its operating leases in the six fiscal months ended July 2, 2022 and July 3, 2021, respectively, which are included in operating cash flows on the consolidated condensed statements of cash flows.  The weighted-average remaining lease term for the Company's operating leases is 8.6 years and the weighted-average discount rate is 5.3% as of July 2, 2022.

The undiscounted future lease payments for the Company's operating lease liabilities are as follows:

 
July 2, 2022
 
2022 (excluding the six fiscal months ended July 2, 2022)
 
$
11,879
 
2023
   
22,412
 
2024
   
20,002
 
2025
   
17,247
 
2026
   
15,522
 
Thereafter
   
57,740
 

The undiscounted future lease payments presented in the table above include payments through the term of the lease, which may include periods beyond the noncancellable term.  The difference between the total payments above and the lease liability balance is due to the discount rate used to calculate lease liabilities.

13

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

Note 4 – Income Taxes

The provision for income taxes consists of provisions for federal, state, and foreign income taxes.  The effective tax rates for the periods ended July 2, 2022 and July 3, 2021 reflect the Company’s expected tax rate on reported income before income tax and tax adjustments. The Company operates in a global environment with significant operations in various jurisdictions outside the United States. Accordingly, the consolidated income tax rate is a composite rate reflecting the Company’s earnings and the applicable tax rates in the various jurisdictions where the Company operates. 

The Company repatriated $81,243 to the United States in the second fiscal quarter of 2022 pursuant to the repatriation program initiated in response to a change in Israeli tax law.  The Company paid withholding taxes, foreign taxes, and Israeli clawback taxes of $25,201 due to the repatriation.  Tax expense for the repatriation was recorded in 2021 when the tax law was enacted.

During the six fiscal months ended July 2, 2022, the liabilities for unrecognized tax benefits decreased by $5,102 on a net basis, primarily due to payments and currency translation adjustments, partially offset by accruals for current year tax positions and interest.

Note 5 – Long-Term Debt

Long-term debt consists of the following:

 
July 2, 2022
   
December 31, 2021
 
             
Credit facility
 
$
6,000
   
$
-
 
Convertible senior notes, due 2025
   
465,344
     
465,344
 
Deferred financing costs
   
(8,042
)
   
(9,678
)
     
463,302
     
455,666
 
Less current portion
   
-
     
-
 
   
$
463,302
   
$
455,666
 

The following table summarizes some key facts and terms regarding the outstanding convertible senior notes due 2025 as of July 2, 2022:

 
Convertible
Senior Notes
Due 2025
 
Issuance date
 
June 12, 2018
 
Maturity date
 
June 15, 2025
 
Principal amount as of July 2, 2022
 
$
465,344
 
Cash coupon rate (per annum)
   
2.25
%
Nonconvertible debt borrowing rate at issuance (per annum)
   
5.50
%
Conversion rate effective June 16, 2022 (per $1 principal amount)
   
32.0005
 
Effective conversion price effective June 16, 2022 (per share)
 
$
31.25
 
130% of the current effective conversion price (per share)
 
$
40.63
 


Prior to December 15, 2024, the holders of the convertible senior notes due 2025 may convert their notes only under the following circumstances: (1) during any fiscal quarter after the fiscal quarter ending September 29, 2018, if the sale price of Vishay common stock reaches 130% of the conversion price for a specified period; (2) the trading price of the notes falls below 98% of the product of the sale price of Vishay's common stock and the conversion rate for a specified period; or (3) upon the occurrence of specified corporate transactions.  The convertible senior notes due 2025 are not currently convertible.

Upon conversion of the convertible senior notes due 2025, Vishay will satisfy its conversion obligations by paying $1 cash per $1 principal amount of converted notes and settle any additional amounts due in common stock.

The quarterly cash dividend program of the Company results in adjustments to the conversion rate and effective conversion price for the convertible senior notes due 2025 effective as of the ex-dividend date of each cash dividend.  The conversion rate and effective conversion price for the convertible senior notes due 2025 is adjusted for quarterly cash dividends to the extent such dividends exceed $0.085 per share of common stock.

14

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

Note 6 - Stockholders' Equity

On February 7, 2022, the Company's Board of Directors adopted a Stockholder Return Policy that will remain in effect until such time as the Board votes to amend or rescind the policy.  The Stockholder Return Policy calls for the Company to return a prescribed amount of cash flows on an annual basis. The Company intends to return such amounts directly, in the form of dividends, or indirectly, in the form of stock repurchases.

The following table summarizes activity pursuant to this policy:

   
Fiscal quarter ended
     Six fiscal months ended  
   
July 2, 2022
    July 2, 2022  
Dividends paid to stockholders
   $
14,339
   $ 28,808  
Stock repurchases
   
26,288
    36,161  
Total
   $
40,627
   $ 64,969  

The repurchased shares are being held as treasury stock. The Company records treasury stock at cost, inclusive of fees, commissions and other expenses, when outstanding common shares are repurchased.  As of December 31, 2021, no shares of common stock were held as treasury stock.  As of July 2, 2022, 1,913,266 shares of common stock are being held as treasury stock.

Note 7 – Revenue Recognition

Sales returns and allowances accrual activity is shown below:

 
Fiscal quarters ended
   
Six fiscal months ended
 
   
July 2, 2022
   
July 3, 2021
   
July 2, 2022
   
July 3, 2021
 
Beginning balance
 
$
39,161
   
$
34,449
   
$
39,759
   
$
39,629
 
Sales allowances
   
19,040
     
22,043
     
46,417
     
45,839
 
Credits issued
   
(16,569
)
   
(15,350
)
   
(44,295
)
   
(43,796
)
Foreign currency
   
(857
)
   
120
     
(1,106
)
   
(410)
 
Ending balance
 
$
40,775
   
$
41,262
   
$
40,775
   
$
41,262
 


Note 8 – Accumulated Other Comprehensive Income (Loss)

The cumulative balance of each component of other comprehensive income (loss) and the income tax effects allocated to each component are as follows:

 
Pension and
other post-
retirement
actuarial
items
   
Currency
translation
adjustment
   
Total
 
Balance at January 1, 2022
 
$
(